Wednesday, October 30, 2013

Biotech Stocks Grossly Outperform the S&P 500 over the Last 6 Months

Who would have thought that biotechnology stocks would have generated twice the return of the stock market in general over the last six months. The S&P 500 was up a little over 10%, yet the iShares Nasdaq Biotechnology ETF (IBB) was up an amazing 22.8%. This is a volatile investment arena. Some biotech stocks may become ten-baggers and some may go out of business. And some will just slowly burn through their cash and deplete just like a wasting stock option. But if a company develops the right drug, the upside can be enormous.

According to the free list of biotechnology stocks at, there are over 150 such stocks to choose from, a few of which even pay dividends. Amgen Inc. (AMGN) is one of the major players in this industry, that does pay a dividend of 1.6%. The company is involved in the treatment and cures in the areas of supportive cancer care, inflammation, nephrology, and bone diseases. The stock trades at 18.7 times trailing earnings and 14.5 times forward earnings. The company just reported earnings, announcing a profit increase of 23.6% on a revenue rise of 9.9%.

Another dividend paying biotech stock is Teva Pharmaceutical Industries Ltd (TEVA), which has a fairly high price to earnings ratio 84.3, but a more reasonable forward PE of 8. The stock pays a yield of 2.6%. Teva is involved in the production of generic pharmaceuticals.

Questcor Pharmaceuticals (QCOR) is a biopharmaceutical company that makes drugs for the treatment of multiple sclerosis and nephrotic syndrome. This company also falls into the dividend paying biotech category, with a yield of 1.8%, with dividends paid each quarter. The stock trades at 16 times trailing earnings and 10 times forward earnings. The company just reported earnings today, announcing earnings per share, excluding one-time item, of $1.54 up from last year's earnings of 92 cents per share, an incredible 67% increase.

To access a list of over 150 biotech stocks, go to The list includes the PE, the forward PE, the PEG and the yield.

Disclosure: Author didn't own any of the above at the time the article was written.



Anonymous said...

Actually Biotech ETF XBI outperforms over last 5 years.

Anonymous said...

Actually Biotech ETF XBI outperforms over last 5 years.

Anonymous said...

Spdr ETF XBI outperforms SPY for past 5 years.

Stockerblog said...

Yes, you are right. XBI outperformed the S&P 500 over the last five years, being up 127%. However, IBB outperformed both, as it was up 200% over five years.